Barack Obama represents the first appearance in a presidential race of a relatively new political type: the community organizer.

His past as a local activist in Chicago has provoked sneers from Republicans and questions from most voters. What the heck is a community organizer, where do these folks get their moneyand why are they so controversial?

The roots of community organizing stretch back to the 1930s and the efforts of organizer Saul Alinsky, founder of the Industrial Areas Foundation and author of Rules for Radicals, to organize people in low-income areas into a political force to combat the political machine that ran Chicago.

Alinsky won many admirers on the Left, but it took President Lyndon Johnson's War On Poverty to supercharge community organizing by directing billions of federal dollars to neighborhood groups with the naive and ambiguous goal of "empowering" communities.

The federal cash, eventually supplemented by state and local tax funds, helped create a universe of government-funded groups headed by local activists running everything from job-training efforts to recreation programs to voter-registration drivesfar beyond anything Alinsky could've imagined.

Thousands of groupseventually, 3,000 in New York City alonearose to snatch government money. One startling sign of the growth: Today, New York now has more jobs at social-service agencies, most funded with government money, than on Wall Street.

Yet those who designed Johnson's programs endowed them with vague goals such as "community empowerment" and often failed to demand specific, achievable results from those they funded. Thus, money went to inexperienced local activists to run jobtraining programs that failed to find people jobs. Other grants went to local groups to help businesses in poor neighborhoods get loanswith little sense of whether their clients could actually ever pay back the money.

Nothing symbolizes the failure and waste better than a federal boondoggle known as the Community Development Block Grant program. Obama calls it "an important program that provides housing and creating [sic] jobs for low- and moderate-income people and places"yet, over the last 40 years, the CDGB has funneled some $110 billion through community groups with little sense that it has done much good.

One visible sign of failure: Buffalo, the city that's gotten the most CDGB funding (per capita), is worse off today than it was 40 years ago. An investigation by The Buffalo News several years ago found that much of the money had been wasted in grants to organizations run by politically connected activists.

New York City has seen it, too. Earlier this year, several City Council aides were indicted for sending grants to a community nonprofit they controlled. Several years ago, investigators looking into illegal loans by a well-connected Bronx nonprofit found that it was paying its top executives hundreds of thousands of dollars a year to run such programs as "homework empowerment" for teenswith no notion of what these programs achieved or how they worked.

Despite such ongoing boondoggles, the funding keeps on flowing, largely because the activists who head these groups moved into politics, wielding the power that tax dollars had bought them to build a base of neighborhood supporters.

In New York City, operators of huge social-services groups like Pedro Espada in The Bronx and Albert Vann in Brooklyn won election to state and federal posts after heading up large, powerful nonprofits. By the late '80s, nearly a fifth of City Council members were products of the tax-funded nonprofit sectorand they were among the council's most strident advocates for higher taxes and more government spending. In cities from Chicago to Cleveland to Los Angeles, the road to electoral success increasingly runs through tax-funded social services.

Meanwhile, groups like the radical ACORN have used government funding to run voter-registration drives that are supposed to be nonpartisan efforts but that have concentrated in signing up voters in heavily Democratic districts to elect politicians who advance ACORN's political goals and protect funding for community activists.

As a result, spending to these groups has boomed while the sector has staved off reform. "The nonprofit service sector has never been richer, more powerful," former welfare recipient Theresa Funiciello wrote in her book Tyranny of Kindness. "Except to the poor, poverty is a mega-business."

Obama began his organizing life in the mid-'80s in a community group whose progress mirrored the industry's: the Developing Communities Project, formed on Chicago's South Side as a "faith-based grass-roots organization organizing and advocating for social change." Though founded with resources from a coalition of churches, over time the DCP evolved into a government contractor, with nearly 80 percent of its revenues deriving from public contracts and grants.

Obama adopted the big-government ethos that prevails among neighborhood organizers, who view attempts to reform poverty programs as attacks on the poor. Speaking in 1995 to The Chicago Reader, an alternative weekly, Obama said, "These are mean, cruel times, exemplified by a 'lock 'em up, take no prisoners' mentality that dominates the Republican-led Congress."

He also derided the "old individualistic bootstrap myth" of achievement that conservatives were touting and called self-help strategies for the poor "thinly veiled excuses for cutting back on social programs."

Obama stuck by those ideas as a state senator. His supporters count among his biggest victories his work to expand subsidized health care in Illinois with social-justice groups like United Power for Action and Justice (an offshoot of Alinsky's Industrial Areas Foundation). Meeting last November with the leaders of ACORN, he declared: "I've been fighting alongside ACORN on issues you care about my entire career," including representing the group in a court case in Illinois. ACORN's affiliated political-action committee soon endorsed Obama for president.

An Obama presidency is likely to be a huge boost to tax-funded nonprofitsbecause his antipoverty agenda is right out of the 1960s. His platform ranges from a commitment to boost funding for CDGB to a plan for providing "a full network of services, including early-childhood education, youth-violence prevention efforts and after-school activities . . . from birth to college" to low-income neighborhoods.

The activist community knows he's one of them. As an organ of the National Housing Institute, a social-justice group, has observed: "Barack Obama carries lessons he learned as a community organizer to the political arena. Both organizers and politicians would be wise to study them closely."

Adapted from the summer issue of City Journal, where Steven Malanga is senior editor.